Kakao Enterprise is under fire for alleged unfair partnerships with small businesses.
On April 25, reports revealed Kakao affiliate Kakao Enterprise sent letters to small business owners around its offices in H Square in the Pangyo Techno Valley to offer a partnership. According to reports, the letter proposed an allegedly unfair partnership that offers discounts to employees of Kakao employees at businesses in the area.
The letter allegedly suggested specific discounts and asked for a reply to Kakao in writing with the discounts they would offer. In exchange, the small businesses would receive a Kakao sticker for their entrances to signify the partnership, which would help boost sales for the businesses as Kakao employees would be incentivized to be customers at the businesses.
Reports say Kakao Entertainment is attempting to reduce costs, including in food expenses. However, the partnership offer is receiving criticism as small businesses in Korea are already struggling with costs of their own. One restaurant owner told media he would be unable to sell at discounted prices as it's already difficult for him. Some owners are also said to be worried about turning the offer down.
Stay tuned for updates.
SHARE
Restaurants in general have small margins. Everyone has to eat and is very competitive in that there are options for people to take their business elsewhere if priced too high. Without reading more about the discount Kakao is asking, I think asking for more than 10% off would be detrimental to the restaurant especially to mom and pop places.